Obamacare: Unfair to the young middle class, punished enough already

The Obama administration came out with a report Monday arguing that 1 million single adults between the ages of 18 and 35 will be eligible for an Obamacare insurance plan costing less than $50 a month.

I’m a healthy 34-year-old with a taxable income hovering right around the Obamacare subsidy level who, for the last several years, has purchased a relatively inexpensive catastrophic health insurance plan from Blue Shield. I get to see the doctor four times a year for a $30 co-pay, and I won’t have to spend the rest of my life working off the debt if I get hit by a bus.

Last month, however, I received a letter from my insurance company informing me that my plan was “no longer available” due to “new requirements for health coverage under the Affordable Care Act.” I am being funneled into the closest equivalent plan under the new California health exchange, and my monthly premium is going to rise by nearly 43% to $214 a month.

My old plan was as bare-bones as they came, so I assumed that even though the new plan would cost more, my coverage would improve under Obamacare, at least marginally.

It did not.

Under my old plan, my maximum out-of-pocket expense was $4,900. Under the new plan, I’m on the hook for up to $6,350. Copays for my doctor visits will double. For urgent-care visits, they will quadruple. Though slightly cheaper plans exist if I decide to shop around on the exchange, I will lose my dental coverage should I switch.

Needless to say, I am not pleased.

Most young, middle-class Americans I know are happy that millions of previously uninsured people will receive free or heavily subsidized insurance under the Affordable Care Act.

We just didn’t realize that, unless we had health insurance at work, we’d be the ones paying for it.

Supporters of Obamacare note that young people have been footing the bill for the older generation for decades through programs like Social Security and Medicare. You pay when you’re young and reap the benefits as you grow older.

Both of those programs, however, are public, with no profit motive. They are both funded by payroll taxes, which, when I see them deducted every month, I don’t have to worry about them being funneled to the pockets of greedy insurance CEOs through creative accounting measures.

Payroll taxes are also collected from almost every wage-earner. With Obamacare, however, people with insurance through their jobs are insulated from the costs imposed on those who shop for individual polices. And most of them will be able to keep their group plans.

Older people in the individual market, meanwhile, may see their premiums go down, regardless of how well-off they may be. That’s because Obamacare mandates that older people can’t pay more than three times the rate of younger members of the pool.

Even the young, healthy and wealthy really don’t have much of a stake in paying for Obamacare. A 43% healthcare increase to a millionaire does not have the same impact as it does on someone making $45,000.

Backers of Obamacare also note that although young healthy people are being asked to sacrifice, they are the ones most likely to be eligible for a subsidized plan. But what exactly does that mean? According to Covered California’s online calculator, were I to make $30,000 (hardly rolling in dough), I would be eligible for a subsidy of $40 a month.

I would still be paying more than I am now for substandard health insurance.

What I mean by substandard is this. We’ve been hearing people complain that the Obamacare-approved policies cover too much, not too little. That’s part of the reason premiums are higher. But from my view, a higher monthly premium along with higher copays create a disincentive. Paying more to see a doctor means there’s less chance I’'ll use that service unless I’m absolutely desperate.

All of this isn’t simply idle hand-wringing. If young healthy people like myself feel we’re being taken advantage of, and opt out of purchasing insurance -- paying the penalty instead -- the healthcare exchanges will collapse. (The penalty in year one for opting out is only $95 or 1% of your salary, whichever is higher -- far less than the cost of even the most basic insurance plan.)

When Obamacare comes fully online, it will do wonders to provide healthcare for people who were not eligible for Medicaid but still could not afford health insurance. If this system is going to be sustainable, however, we’re going to need to find a way to get older and wealthier Americans to chip in more. Because, right now, it’s young, middle-class people just outside the subsidy range who are biting the bullet. Young, middle-class people who already bore the highest toll in the recent financial collapse, who have seen our wages sliced and our job prospects dwindle.

You can only ride our backs for so long before we’re going to tell you enough is enough.

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